RBL Bank shares worth ₹678 crore change hands in a block deal; M&M likely to have exited

Shares of RBL Bank Ltd. are in focus on Thursday, November 6, as the lender saw a block deal during the pre-market window.

On Wednesday, CNBC-TV18 reported, citing sources, that Mahindra & Mahindra (M&M) was to sell its entire 3.45% stake in the lender for ₹682 crore via a block deal.

As many as 2.11 crore shares or 3.45% of the company's outstanding equity changed hands as part of the block deal. Price of the transaction is said to be ₹321 per share. The floor price was said to be at ₹317 per share, sources said.

With this transaction, M&M has earned a 64% return on its ₹417 crore investment made in July 2023, when it acquired a minority stake in the lender for ₹197 per share.

Shortly after the initial transaction, M&M managing director Anish Shah had made it that the automaker did not intend to invest further in RBL Bank unless there is a compelling investment case. The initial plan was to not increase the stake beyond 9.9%. "There is no intention of going further at this point. But it helps us understand the sector a lot better to enhance the value of a business that is nearly a ₹40,000 market capitalisation," Shah had said at the time.

On another note, Emirates NBD Bank is investing up to ₹26,853 crore (approximately $3 billion) to acquire a 60% stake in RBL Bank. The investment will be made through a preferential equity issuance at ₹280 per share and the lender's board approved the issuance and allotment of 96 crore new equity shares last month

RBL Bank shares ended the previous session nearly 2% lower at ₹322.3 apiece. The stock has gained 16.9% in the past month, 63.5% in the last six months and 104.3% this year, so far.

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